What is the issue?

Initially established as administrative processors of prescription drug claims for health plans over time PBMs have transformed into major players in the prescription medication world.

Since 1987, when Advance PCS/Caremark (now CVSHealth) became the last of the original "big 3" PBMs to incorporate, the others being Medco and Express Scripts which merged in 2012, total prescription drug expenditures have skyrocketed 1010% and per capita expenditures have increased 756%.

PBMs manage pharmacy benefits for over 253 million Americans, according to their trade group. The three largest companies in the PBM industry - Express Scripts, CVS Caremark, and OptumRx - cover more than 180 million lives, or roughly 78% of the market.

As of 2016, the two largest PBMs - CVS Health and Express Scripts - rank on the Fortune 500 list with astonishing revenues of $178 billion and $100 billion respectively.

"Over the past decade, the role of PBMs in the delivery of health care has increased, due to a confluence of factors: coverage expansions under both the Medicare Part D prescription drug benefit and the Affordable Care Act, combined with an increase in prescription drug spending that has motivated commercial health plans and self-insured employers to outsource the management of their spending on outpatient prescription drugs."

And, per an article in The American Prospect:

"Over the past 30 years, PBMs have evolved from paper-pushers to significant controllers of the drug pricing system, a black box understood by almost no one. Lack of transparency, unjustifiable fees, and massive market consolidations have made PBMs among the most profitable corporations you’ve never heard about."

The lack of transparency in the largest PBMs and the lack of meaningful competition negatively affects patients, pharmacists, insurance plans, manufacturers, and ultimately taxpayers who fund government sponsored healthcare programs.